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The U.S. Supreme Court verdict against President Joe Biden’s student loan forgiveness plan is unlikely to be consequential for the U.S. economy at large, economists said.
Although 40 million-plus Americans hold student debt, some 287 million do not.
The timing of a spending pullback, however small, is precarious, economists said.

Seksan Mongkhonkhamsao | Moment | Getty Images

The Supreme Court struck down the Biden administration’s student loan forgiveness plan Friday.
While the bombshell ruling will undoubtedly be a blow to borrowers who had hoped — perhaps even expected — they’d have up to $20,000 of their student debt erased, the verdict is unlikely to be consequential for the U.S. economy at large, economists said.

“The Supreme Court decision to strike down loan forgiveness should have no meaningful impact on the economy,” said Mark Zandi, chief economist of Moody’s Analytics.

The fight against inflation gets a boost

It’s challenging to judge the economic effect of a sweeping policy such as student loan forgiveness.
If it had passed, it might have had a few broad, though marginal, effects on the economy, experts said.
For one, debt relief might have raised the standard of living for millions of households. With debt payments erased, consumers would have had more wiggle room in their budgets and would have pumped more money into the economy, economists said.
Estimates suggest consumers would spend about 3% to 6% of their increased wealth on new or accelerated purchases, according to the Committee for a Responsible Federal Budget.

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That dynamic may have exacerbated inflation, said economists. Put another way, if consumers had more wealth — as much as $20,000 — to spend on goods and services, that may have served to prop up prices.
Overturning student loan forgiveness is therefore somewhat deflationary and means the Federal Reserve may not have to raise borrowing costs as much as it otherwise would if forgiveness succeeded, economists said.
Inflation has fallen significantly to a 4% annual rate from its 9.1% pandemic-era peak but remains elevated above the central bank’s 2% long-term target.
“This will work in the direction of further slowing consumer spending,” said Shai Akabas, executive director of economic policy at the Bipartisan Policy Center. “And that will directionally contribute toward the Fed’s goal of getting inflation back to its target level.”

Borrowers may cut back on purchases

Consumer spending is the lifeblood of the U.S. economy, accounting for about 70% of U.S. gross domestic product, a measure of the nation’s total economic output.
The Supreme Court’s ruling is unlikely to trigger a big pullback in household spending, in an aggregate sense, economists said. That’s because nothing much has changed relative to household balance sheets. They owed the debt before and still do today, Zandi said.
“I’m sure [those borrowers] who applied for forgiveness are disappointed, but I don’t think it’ll have any bearing on their financial situation, because nothing has changed,” he said.
However, the resumption of monthly student loan payments in October, after a three-year pause, will likely have a bigger effect. Moody’s estimates those payments to be about $275 a month for the average borrower.

But again, the effect of resumed payments will likely be muted at a macro level, economists said.
For example, more than 40 million Americans have student loan debt, while about 287 million do not, said Tim Quinlan, senior economist at Wells Fargo Economics.
Quinlan estimates resumed monthly debt payments for this group, in combination with the effect of the upended loan forgiveness plan, would reduce annual U.S. consumer spending 0.5%, at the high end of the estimate range.
“It barely moves the needle in terms of broad measures of consumer spending,” Quinlan said of the macro effect.
At a micro level, however, “it’s a big deal for the households that are impacted,” Quinlan said.

Recession fears remain

The timing of this expected spending pullback, however small, is precarious, economists said.
Many economists forecast the U.S. to enter a mild recession later this year or in 2024, due to factors such as higher interest rates and tighter lending standards after recent turmoil in the banking sector.
The concern is that the aggregate effect of student loan policies — a resumption of loan payments and overturned forgiveness — may incrementally “add fuel to the fire,” Quinlan said.
Federal data issued Friday suggests consumer spending has already slowed significantly.
That said, there are student loan policies that have already been enacted by the Biden administration that will likely help borrowers affected by Friday’s Supreme Court ruling, economists said.

For example, the Biden administration is giving millions of borrowers who defaulted on their student loans a “fresh start” by marking their accounts as current. The White House also rolled out new income-driven repayment plans to make payments more affordable.
“In theory, those policies should be helpful to those who’d be most impacted by this decision by the Supreme Court,” Akabas said.
More relief may be forthcoming. The White House said Biden, in a forthcoming speech Friday, would “announce new actions to protect student loan borrowers.”
“The script is still being written here on all of this,” Zandi said. “I’m not sure the Supreme Court’s decision is the final say on what happens.” More

The Supreme Court on Friday blocked President Joe Biden’s plan for federal student loan forgiveness, which would have provided millions of borrowers up to $20,000 of relief.
Meanwhile, the student loan payment pause will end soon, with interest accruing on Sept. 1 and payments due in October.
Here’s how borrowers should prepare over the next few months, according to advisors.

A sign calling for student loan debt relief is seen outside the U.S. Supreme Court in Washington, D.C., on Feb. 28, 2023.
Nathan Howard | Reuters

If you’re one of the millions of Americans affected by the Supreme Court’s decision to strike down student loan forgiveness, financial advisors have tips before payments resume.
The high court on Friday blocked President Joe Biden’s plan for federal student loan forgiveness, which would have provided borrowers up to $20,000 of relief. 

As the Covid-era payment pause ends, the ruling will have a “detrimental impact” on borrowers still recovering from the pandemic or wrestling with inflation, according to Ethan Miller, a certified financial planner and founder of Planning for Progress.
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Congress agreed not to extend the student loan payment pause again in June as part of the debt ceiling deal, with interest resuming Sept. 1 and payments due in October, according to the U.S. Department of Education.
“For some folks, it will require some hard choices,” said Miller, a planner in the Washington, D.C., area who specializes in student loans. “And for other borrowers, it is going to require a fundamental reimagining of their finances.”
Over the past few years, the student loan pause has provided freedom from payments, which has allowed some borrowers to save for buying a home or starting a family, he said. “This is just a ton of bricks falling right back down on some of those dreams.”

For some folks, it will require some hard choices, and for other borrowers, it is going to require a fundamental reimagining of their finances.

Ethan Miller
Founder of Planning for Progress

Biden’s plan would have cleared the student loan balances of around 14 million people, according to estimates from some experts. The cancellation also applied to so-called Parent PLUS loans, which are federal loans parents can use to help dependent children with college expenses.  
“It’s very disappointing for a lot of Americans,” added Becca Craig, a Kansas City-based CFP at Buckingham Strategic Wealth, who also specializes in student loan planning.

Review your student loan repayment plan

Craig urges borrowers to review their student loan repayment plan options and possibly make a change, depending on your overall financial goals.
“For a lot of borrowers, it’s really the lowest payment possible because they’re shooting for public service loan forgiveness or income-driven repayment forgiveness,” she said.

While the final details still haven’t been released, borrowers should also watch for updates on Biden’s new repayment plan, which could significantly lower future monthly payments, Craig said.
In the meantime, you should double-check your loan servicer, which may have changed over the past three years, along with income certification, banking details and more.
For borrowers with income-driven repayment plans, it’s important to watch for the deadline to recertify your income, Miller said. However, there may be opportunities to lower your payments, depending on when you submit the paperwork. More

Supplemental Security Income, or SSI, benefits provide a safety net for low-income elderly and disabled individuals.
But the program also comes with strict rules on how much money recipients can have saved.
New research takes a look at the impact of raising those thresholds or eliminating them entirely.

JGI/Tom Grill | Tetra images | Getty Images

A federal program for low-income elderly and disabled individuals — known as Supplemental Security Income — includes savings limits for beneficiaries that have largely not been updated since the program was created in 1972.
Individuals who receive SSI benefits may have just $2,000 in assets, while married couples or two-parent families with beneficiary children may have $3,000, according to the Center on Budget and Policy Priorities.

The list of assets that counts towards the limit includes money in bank accounts, cash, retirement savings, stocks, mutual funds, savings bonds, life insurance, burial funds and household goods, according to the nonpartisan research and policy institute.
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It may also include assets owned by parents, spouses or immigration sponsors.
Two categories that do not count include primary residences or vehicles.
The current $2,000 to $3,000 asset thresholds for individuals and couples were established between 1985 and 1989, according to the research.

That’s up from the original resource limits of $1,500 per individual and $2,250 per couple when the program was established in 1972.
Today, those thresholds are just one-sixth of their 1972 value, the Center on Budget and Policy Priorities notes, and their worth declines further each year with inflation.
If they had been indexed to inflation, the limits for 2023 would be $9,929 per individual and $14,893 per couple.

How SSI’s asset limits may be raised

In new research, the Center on Budget and Policy Priorities considers the effects of raising or eliminating the asset limits SSI has for beneficiaries.
“A higher limit would encourage — rather than penalize — saving and allow people to retain savings to use when they really need those resources,” the research states.
About 100,000 SSI beneficiaries have their benefits suspended or terminated every year because they went over the asset limits, according to Kathleen Romig, director of Social Security and disability policy at the Center on Budget and Policy Priorities.
That can be triggered by even small inheritances or a birthday gift. People who go over the limits may owe back benefits and have to adjust their life plans when they lose their benefit income, Romig noted.
“On the Hill, they often talk about waste in terms of government spending,” Romig said. “This is a such a waste to make people go through all of this.”
Raising the thresholds would not dramatically increase enrollment in the program, the research finds.
If the limits were raised to $10,000 per beneficiary and $20,000 per couple, participation in SSI would increase by up to 3%, the research finds, based on an analysis of Census Bureau data.

We shouldn’t punish seniors and Ohioans with disabilities who do the right thing and save money for emergencies by taking away the money they rely on to live.

Sen. Sherrod Brown
Democratic senator from Ohio

One bill – the Supplemental Security Income Restoration Act – calls for raising the asset limits to those thresholds, while also indexing them to inflation.
The bill was proposed last April by two senators from Ohio, Sherrod Brown, a Democrat, and Rob Portman, a Republican. While Portman has since retired, there are plans to reintroduce the proposal.
“We shouldn’t punish seniors and Ohioans with disabilities who do the right thing and save money for emergencies by taking away the money they rely on to live,” Brown said in a statement, while calling the rules “arbitrary and outdated.”
“I plan to reintroduce my bill that would update these rules for the first time in decades to allow beneficiaries to save without putting their benefits at risk,” he said.
If the SSI resource limits were raised even further, to $100,000 per beneficiary, about 5% more people would qualify for benefits, the Center on Budget and Policy Priorities found.
That $100,000 threshold would be in line with the amount eligible SSI beneficiaries are currently allowed to hold penalty-free in ABLE accounts, tax advantaged savings programs for people with disabilities.

ABLE accounts are currently available to individuals who became disabled by age 26. Recent legislation called the Secure 2.0 will make it so that age is raised to those disabled by age 46, which will make it so a majority of SSI beneficiaries can have those accounts, the Center on Budget and Policy Priorities notes.
Another change — excluding the consideration of retirement accounts — could also help bolster SSI program eligibility.
Eliminating the asset test entirely would raise participation in the program by 6%, the nonpartisan research and policy institute found.

Changes would save time and money, experts say

SSI’s asset limits can make it impossible for beneficiaries to deal with financial situations that are even a little bit complicated, according to Kristen Dama, an attorney at Community Legal Services of Philadelphia, which represents about 1,100 clients in SSI matters each year.
Even if beneficiaries do not have certain assets the Social Security Administration suspects they have, the onus may be on them to provide the necessary paperwork to prove that, according to Dama.

The_burtons | Moment | Getty Images

Raising the limits may not only help prevent interruptions in benefits, it would also help reduce the administrative burden placed on the Social Security Administration to manage.
Higher asset limits would make it so the Social Security Administration no longer has to look at every single bank statement, Dama noted, saving time for staff members who already face high workloads.
About 35% of the Social Security Administration’s administrative outlays are currently devoted to the administration of SSI, according to the Center on Budget and Policy Priorities.
“It’s going to be an easier program for Social Security to administer and it’s going to save taxpayer dollars,” Dama said of easing SSI’s asset restrictions. More

Asset management giant Fidelity Investments is again trying to launch a spot bitcoin exchange-traded fund.
The move comes two weeks after BlackRock filed for a spot bitcoin ETF.
One of the SEC’s key concerns about a spot bitcoin product is transparency in the market and the potential for manipulation.

A Fidelity Investments location in New York.
Scott Mlyn | CNBC

Asset management giant Fidelity Investments is again trying to launch a spot bitcoin exchange-traded fund, according to a Thursday filing.
The move comes two weeks after BlackRock filed for a spot bitcoin ETF, which has long been opposed by the U.S. Securities and Exchange Commission.

Other firms appear to have taken BlackRock’s filing as a sign that the SEC’s stance could soon change. Since then, WisdomTree, VanEck and Invesco have taken the initial steps toward their own funds. Cathie Wood’s Ark Invest filed for changes to its proposed bitcoin fund Wednesday that brought it closer in line with BlackRock’s application.
Thursday’s filing is a proposed rule from the Cboe BZX Exchange to list the Wise Origin Bitcoin Trust, the name of Fidelity’s previously proposed bitcoin ETF that was denied by the SEC. The exchange has made similar filings for other firms over the past two weeks.
The SEC has so far rejected every spot bitcoin fund application on which it has made a decision. The commission is in a legal battle with Grayscale about its decision to block the conversion of the Grayscale Bitcoin Trust into an ETF. A decision in that case is expected later this year.
One of the SEC’s key concerns about a spot bitcoin product is transparency in the market and the potential for manipulation. The BlackRock filing includes a proposed surveillance-sharing agreement that could alleviate those concerns. The subsequent filings have similar proposals.
The SEC has already allowed the creation of ETFs that track bitcoin futures contracts, including the ProShares Bitcoin Strategy ETF (BITO) that has more than $1 billion in assets. The first leveraged bitcoin futures fund hit the market Tuesday.
The new rush for ETFs appears to have buoyed prices for bitcoin. The digital currency was trading near $30,500 Thursday afternoon, up from below $26,000 prior to the BlackRock filing. More

The Supreme Court ruling on affirmative action at Harvard and the University of North Carolina would likely be an immediate blow to the ability to maintain diverse classes of students, experts say.
However, “the ruling does allow for students to express, through their essay or otherwise, things about themselves that could include race,” says Robert Franek, editor-in-chief of The Princeton Review.

Harvard Yard, on the campus of Harvard University in Cambridge, Massachusetts.
Maddie Meyer | Getty Images

By lunchtime Thursday, Christopher Rim, president and CEO of Command Education, had received more than two dozen calls from students and their families, all with one question: How would the Supreme Court’s ruling on the affirmative action admission policies of Harvard and the University of North Carolina affect their future applications?
“I do think the makeup of the schools is going to change drastically,” he said.

The ruling is considered a massive blow to decades-old efforts to boost enrollment of minorities at American universities through policies that took into account applicants’ race.

“There’s a real risk that the incoming classes will look different,” said Cara McClellan, director of the Advocacy for Racial and Civil Justice Clinic and practice associate professor of law at the University of Pennsylvania Carey Law School.
“Without considering race, there would be a reduction in the number of underrepresented students of color.”

Diversity could take an immediate hit

Studies show the effect on colleges’ and universities’ ability to maintain racial and ethnic diversity would likely be immediate.
After the University of California eliminated affirmative action in 1996, the share of underrepresented groups fell 12%, and when Michigan banned race-conscious admissions, Black undergraduate enrollment at the school dropped nearly by half from 2006 to 2021, according to the Urban Institute.

“This idea, essentially striking down affirmative action, on its surface will result in less diverse classes,” said Robert Franek, editor-in-chief of The Princeton Review.

Applicants can still highlight their racial identity

But because the ruling is narrowly focused on the admissions process, “if an applicant wants to talk about their experience in high school or any other aspect of their life that is related to their racial identity, they can do so,” according to Kelly Slay, assistant professor of higher education and public policy at Vanderbilt University.
Colleges can still consider personal essays about “how race affected his or her life, be it through discrimination, inspiration or otherwise,” Chief Justice John Roberts wrote, even though “universities may not simply establish through application essays or other means the regime we hold unlawful today.”
“The ruling does allow for students to express, through their essay or otherwise, things about themselves that could include race,” Franek also noted.
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“If only the playing field of K-12 education — prior to the time students apply to colleges — was a level one,” Franek said.
“It is not, particularly among students attending public schools where funding, resources and opportunities vary greatly based on locale as well as socioeconomic factors.”

Colleges may find other ways to remove barriers

That’s where the burden shifts back to colleges to come up with alternative ways to level the playing field, experts say.
Rim predicts that the Supreme Court’s decision could encourage colleges to put more weight on students’ household income and their regional background to diversify their student bodies. Schools may also rely less on standardized test scores or even eliminate SAT and ACT requirements, which have reinforced race gaps, other studies show.
“It’s really important to emphasize that colleges and universities still have duties to eliminate barriers,” McClellan said.
“Remember that there are still many people in this country who recognize the value of diversity,” she added. “Race continues to matter.”
Subscribe to CNBC on YouTube. More

Millions of Americans are battling scorching temperatures as the country faces a dangerous heat wave.
Meanwhile, U.S. residents are expected to pay about 2% more for electricity this summer, the U.S. Energy Information Administration predicts. 
Experts cover four ways to save money on cooling costs this summer.

The sun sets behind power lines near homes during a heat wave in Los Angeles, Sept. 6, 2022.
Patrick T. Fallon | Afp | Getty Images

As millions of Americans across the country grapple with scorching heat, experts are offering tips for saving money amid record-breaking temperatures.
Despite falling inflation, electricity prices remain elevated with a 5.9% annual increase in May, according to the U.S. Bureau of Labor Statistics. This summer, Americans are expected to pay about 2% more for electricity compared with last year, the U.S. Energy Information Administration predicts. 

“This is one of those difficult times where staying cool is not just a matter of comfort and convenience — it can be a health and safety issue,” said Bruce McClary, a senior vice president of the National Foundation for Credit Counseling. 
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McClary said the heat wave is particularly concerning for warmer parts of the U.S., where summertime energy bills are already higher. For cash-strapped consumers, larger-than-expected electric bills can sometimes be the “tipping point” into a financial crisis, he said.
With lingering triple-digit temperatures in some parts of the country, here are some of the best ways to save on cooling expenses, according to experts.

1. Increase your thermostat

One of the top ways to save on home-cooling costs is to bump up your thermostat, according to Mary Farrell, a senior editor with Consumer Reports. While your savings may depend on many factors, she said that changing the setting by even a few degrees can mean substantial savings.

You can save up to 10% per year on both cooling and heating by adjusting your thermostat seven to 10 degrees from its normal setting for eight hours a day, according to the U.S. Department of Energy.

2. Minimize heat gain

It’s also critical to reduce your home’s “radiant heat gain” by closing the blinds or curtains for sun-facing windows and keeping the doors shut, said Arcadio Padilla, complex issues supervisor for Texas-based Reliant Energy.
While it’s nice to have natural light, it brings too much heat into the home during the summer, he said. “And that’s our enemy right now.”

3. Optimize your airflow

Another wallet-friendly option is to check on your system’s airflow. “Air conditioners use more energy when they have to work harder,” said Adam Cooper, Edison Electric Institute’s managing director of customer solutions. 
Cooper said replacing dirty air filters reduces energy consumption 5% to 15%, and you can make sure the system is working efficiently with regular tuneups and keeping debris clear from the unit outside.

4. Check your thermostat setting

For high-humidity areas, Padilla from Reliant Energy also recommends keeping your thermostat on the “auto” setting rather than “on” or “circulate.”
“We don’t want to introduce more humidity,” he said, so if you have a smart thermostat, it’s critical to turn off the circulate function. More

Within 24 hours, student loan borrowers are likely to learn the fate of the Biden administration’s debt forgiveness plan.
The Supreme Court is expected to issue its decision Friday, which could be the last day of its term before it breaks for summer recess.

Visitors with signs regarding student loan payments outside of the US Supreme Court in Washington, DC, US, on Tuesday, June 27, 2023.
Al Drago | Bloomberg | Getty Images

The Supreme Court’s term is almost over and the justices still haven’t issued a decision on President Joe Biden’s plan to cancel up to $20,000 for tens of millions of Americans. But the ruling is almost certain to come out Friday, experts say.
“I would expect it then, absent some very unusual circumstances,” said Amy Howe, a co-founder of Scotusblog.

Jed Shugerman, a law professor at Fordham University and Boston University, agreed, saying it was “almost certain” that the justices will issue the rest of their decisions Friday before they break for their summer recess.
“The justices preserve July and August for getting out of town,” he said.
There is only a small chance that the justices add another decision day next week or request more time with this case.
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Borrowers should be able to read the ruling on the Supreme Court’s website, likely sometime Friday morning.

The other big decision expected tomorrow, 303 Creative Inc. v. Elenis, involves a Colorado web designer who objects to providing services for same-sex marriages.

What’s at stake in loan forgiveness decision

The justices’ ruling will determine whether the Biden administration can move forward with its plan to wipe out more than a quarter of the country’s $1.7 trillion in outstanding federal student debt.
Roughly 14 million people would have their student debt entirely cleared by the program, according to an estimate by higher education expert Mark Kantrowitz.
In total, around 37 million people would be eligible for some loan cancellation, Kantrowitz estimates — up to $20,000 if they received a Pell Grant in college, a type of aid for low-income families, or as much as $10,000 if they did not.
Shortly after Biden announced his plan, the legal challenges piled up. The program has now faced at least six lawsuits from Republican-backed states and conservative groups, most of which accuse the president of executive overreach.
Two of those legal challenges made it to the Supreme Court: one brought by six GOP-led states — Arkansas, Iowa, Kansas, Missouri, Nebraska and South Carolina — and another backed by the Job Creators Network Foundation, a conservative advocacy organization.

Justices consider executive authority to cancel debt

In the cases, the justices examined whether Biden has the power to forgive so much student debt without authorization from Congress. And at an estimated cost of $400 billion, the policy would be among the most expensive executive actions in U.S. history.
Biden officials insist that he’s acting within the law, pointing out that the Heroes Act of 2003, which is a product of the 9/11 terrorist attacks, grants the U.S. secretary of education the authority to make changes to the federal student loan system during national emergencies. The country was operating under an emergency declaration due to Covid-19 when the president rolled out his forgiveness plan.
The plaintiffs trying to block forgiveness say the president is incorrectly using the law, which they argue allows only for narrow applications of relief and not the kind of across-the-board loan cancellation the president wants to deliver.

The justices also considered whether the plaintiffs suing the Biden administration had successfully shown they’d be harmed by the president’s policy, which is typically a requirement to gain the right to sue. The need to prove so-called legal standing is designed to prevent people from suing against different policies and programs simply because they disagree with them.
Multiple justices, including some of the conservatives, seemed unconvinced during oral arguments that the plaintiffs had proven injury, Shugerman said. As a result, although most pundits expect forgiveness to be struck down given the high court’s conservative majority, there is still a possibility for it to survive.
For now, Kantrowitz said to borrowers, “Hold tight.” More

The Covid-19 pandemic prompted the Social Security Administration to prioritize phone over in-person services.
But outdated technology and other glitches led to disruptions, a new report found.

Thanasis Zovoilis | Getty

Callers who have sought help from the Social Security Administration in recent years have reported long wait times, dropped calls and inability to access the agency’s services.
A new report from the Social Security Administration Office of the Inspector General found the agency experienced more than 40 telephone system disruptions between May 2021 and December 2022.

The disruptions came as the agency limited its in-person services following the onset of the Covid-19 pandemic. During that time, the telephone was the “primary option” for the public to interact with the agency’s employees, the report noted.
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Most of the disruptions happened between October and December 2022 and involved the agency’s 800 number, resulting in longer wait times or busy messages, according to the report from the office of Inspector General Gail Ennis. The office oversees the Social Security Administration’s programs and operations on the public’s behalf.
The unanswered rate reached its highest among the service disruption dates identified in the report — 80.4% — on Feb. 22 and 23. During those two days, excessive calls per second happened while the phone system was at peak capacity, while the average speed with which calls were answered was 46.3 minutes.
The servers were rebooted, and preventive measures were put in place with the goal of preventing the issue from happening again, according to the report.

Other dates identified in the report showed the unanswered rate ranged from 32.3% at the lowest, while the average speed at which calls were answered was at least 13.5 minutes.

The official average phone wait times are around 35 minutes, according to Kathleen Romig, director of Social Security and disability policy at the Center on Budget and Policy Priorities.
“Most people I’ve talked to have experienced longer wait times than that,” Romig said.
For periods of up to two days, the 800-number services, including those that are automated, were unavailable, the report found.
Reasons for the disruptions included defective hardware, software glitches and server issues.
“The telephone is still a primary method of communication for handling business for many Americans, particularly the vulnerable, elderly or disabled,” said Ennis. “It is critical that SSA is reachable, especially by those who depend on them the most.”

Phone system upgrade coming

To better serve the public following the onset of the pandemic, the Social Security Administration implemented temporary workarounds to its telephone systems, the agency’s chief of staff, Scott Frey, said in a written response to the Office of the Inspector General’s report.
“Since then, we worked steadily to improve the stability of this temporary solution, reducing service disruptions since Dec. 30, 2022,” Frey wrote.

For years, the Social Security Administration has had three telephone systems for its 800 number, field offices and headquarters, according to the report. The agency plans to replace those with a single, uniform platform that is intended to be more “efficient, stable and functional,” according to the report. The Covid-19 pandemic has delayed that upgrade.
The agency plans to implement a new telephone platform for the 800 number by the end of the 2023 fiscal year, Frey wrote.
The Social Security Administration did not immediately respond to a request for further comment.

More funding for SSA also needed, expert says

A Social Security Administration office in Sebring, Florida.
Jeff Greenberg | Universal Images Group | Getty Images

In addition to technological improvements, the Social Security Administration also needs to have more people answering the phone, according to Romig.
“In order to have more people answering the phones, you need more money,” she added.
But securing extra resources for the federal agency may not be easy, Romig said.
The recent debt limit deal agreed to an average flat funding of 2023 levels for next year, she added. Romig noted, however, that House Republicans are pushing for average appropriations of 2022 levels.
Either of those options would be harmful to the agency’s ability to provide services, she said.

In order to have more people answering the phones, you need more money.

Kathleen Romig
director of Social Security and disability policy at the Center on Budget and Policy Priorities

The agency has many fixed costs that increase with inflation. At the same time, about 1 million people become beneficiaries on average each year due to the aging population, Romig said.
Capping fiscal year 2024 spending at a 2022 enacted level would cause a cut of about 6% from the agency’s 2023 enacted funding, Social Security Administration acting commissioner Kilolo Kijakazi wrote in a March letter to Rep. Rosa DeLauro, D-Conn., ranking member of the House Appropriations Committee.
A 6% cut below current funding would “significantly affect our ability to serve the public and undermine our core mission — producing longer wait times for benefits and to reach SSA representatives, as well as reduced access to in-person service,” Kijakazi wrote. More